Family BBQ …. Simply, “can you afford to?”
As Commercial Real Estate agent’s that never get given tongs at a backyard BBQ gathering and easily bullied into Coronas we seem to always find our way into the spotlight allowing interrogation by own family and friends hoping for a $10 million dollar listing potential to get the most out of their investment.
Most times the interrogator will look you in the face and ask “commercial real estate is better investment then a house, aye?”….. I love to say “not everyone deserves it” but I politely answer “can you afford it?”.
1. Commercial Property Loans require 70% LVR – a larger deposit with less
buyer demographics on market allowing stable value fluctuations.
Residential Loans allow up to 90% LVR – requiring less deposit for exploiting market values with less risk but wide range fluctuations.
2. Commercial Loans require 15 to 20 year working plans.
Residential Loans need up to 30 years of life commitments.
3. Commercial Tenants expect to pay most expenses on behalf of owner.
Residential Tenants seek assistance to pay most expenses from owner.
4. Commercial Leases can range from 3 years to 10 years with fixed stable increases.
Residential Leases are only 6 months to 1 year that could decrease in value.
5. Commercial Loan Process and Serviceability requires sacrifice giving early
retirement
Residential Loan Process and Requirements gives flexibility of a late retirement.
So what do I say? And there's only 4 Coronas in the esky,
if I say “not everyone deserves it” I ain’t getting a Corona.
If I ask “can you afford it?”,
then I have to cringe in the spotlight while the Coronas are finished up by caring cousins.
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